McConnell’s Task: Threading the Reconciliation Needle

The Capitol at night
The parliamentary strategy that was finally supposed to deliver a major Republican victory by forcing President Obama to defend the Affordable Care Act with his veto pen has become bogged down in a legislative morass — made more difficult by a House Republican conference that spent weeks this autumn in disarray.In the run-up to last year’s elections, Republicans promised to attack the ACA through the budget reconciliation process, a tactic that would avoid a certain Democratic filibuster in the Senate. Republicans knew they wouldn’t get the law repealed this year, thanks to Obama’s veto power.

But a veto itself, the theory went, would inject new life into an anti-Obamacare movement that has now twice failed to gain traction in the Supreme Court—and catapult the massive healthcare law into the heart of the 2016 presidential race just as conservatives expected public frustration with spiking insurance premiums to peak.

Give us the White House, the GOP argument would have been, and we can scrap the whole thing, Senate Democrats be damned.

But legislation to repeal the ACA has been stymied by parliamentary and political quagmires, blocked by strict Senate rules and probably unable to win the support of even 51 Senate Republicans. And Senate Majority Leader Mitch McConnell (R-Ky.), the formidable legislative strategist who is now tasked with navigating his conference, has his House colleagues largely to thank for his troubles.

The train has been coming down the track for weeks.

Reconciliation refers to a special budget procedure, designed to give favored consideration to bills aimed at cutting the federal deficit. In the Senate, any legislation considered under its auspices cannot be filibustered, effectively lowering the usual 60-vote requirement to a simple majority, just 51 votes.

With a 54-seat majority, McConnell always had a narrow margin of error, even with the lower vote threshold. And that slim buffer shrunk quickly once House leadership decided to add language defunding Planned Parenthood to the reconciliation bill, which until then had exclusively targeted the healthcare law.

In the wake of a series of controversial videos that allegedly showed Planned Parenthood executives discussing the sale of fetal tissue, 37 GOP House members signed onto a letter saying they would not support any appropriations bill, continuing resolution or year-end omnibus bill that didn’t strip federal funds from the health organization.

The letter came ahead of a Sept. 30 deadline to pass a short-term government funding extension, and carried the added weight of being signed by many of the same members who had primed a parliamentary vote on then-Speaker John Boehner’s (R-Ohio) speakership.

Knowing that Democrats and the White House would rather see a government shutdown than agree to such demands, House leaders were faced with two unpalatable choices: follow the hardliners’ lead and shut the government down just when they were hoping to show the country they could govern, or risk triggering a public referendum on Boehner.

In the end, Boehner’s resignation deflated the tension in Congress and allowed a “clean” stopgap-spending bill to pass Congress, but not before House leaders had decided to try and placate their restive colleagues by adding a measure defunding Planned Parenthood to the reconciliation Obamacare repeal.

It is a safety valve that Speaker Paul Ryan (R-Wis.) leaned on as recently as Nov. 5.

“We have defunded Planned Parenthood through the reconciliation process, which is our best chance and opportunity of actually getting a bill on the president’s desk,” he told reporters at a press conference that day.

But by diverting the Planned Parenthood problem to the reconciliation process, House Republicans put their moderate Senate colleagues in a tough spot, and ultimately probably lost their votes.

Sen. Susan Collins (R-Maine) told Morning Consult before the final details on the reconciliation bill became public in September that she would be concerned of any measure that stripped the group’s government financing.

“Obviously it would concern me if it were going to completely defund Planned Parenthood,” she said of the reconciliation legislation.

Sen. Mark Kirk (R-Ill.) is another potential no vote. Kirk, in the middle of a tough re-election campaign, has already voted against stripping Planned Parenthood funding twice in recent months, which has kept the vulnerable incumbent off of the group’s political hit list.

Sens. Kelly Ayotte (R-N.H.), who faces her own tough re-election bid, and Lisa Murkowski (R-Alaska) voted against proceeding to a short-term funding bill in September that would have defunded the group.

The potential opposition of those four senators alone would have made the vote tight, if not already a fait accompli, but McConnell also lost three of his members the moment that House leaders, concerned that a full Obamacare repeal would not pass muster in the Senate, decided to target only specific portions of the law.

House leaders’ concerns stemmed from an arcane Senate proviso called the Byrd Rule, a kind of multi-step purity test intended to ensure that reconciliation is used primarily to reduce federal deficits. The Congressional Budget Office released a score in June that showed a full ACA repeal would increase federal deficits by $137 billion over ten years, an assessment Republican leaders feared would violate one of the Byrd tenets.

So instead House Republicans drafted a bill that would repeal the law’s individual and employer mandates, taxes on expensive employer-sponsored health coverage and medical devices, and the automatic enrollment requirement for employers with over 200 employees. It would also terminate the Prevention and Public Health Fund and, of course, bar federal funds from flowing to Planned Parenthood or its subsidiaries for one year.

It left major portions of the ACA, such as the state Medicare expansion and the insurance subsidies, in place.

But the Byrd Rule argument fell short of convincing Sens. Ted Cruz (R-Texas), Mike Lee (R-Utah) and Marco Rubio (R-Fla.), who released a statement on Oct. 22, the day before the House passed the reconciliation bill, saying they would not vote for the proposal in the Senate.

“Each of us campaigned on a promise to fully repeal Obamacare and a reconciliation bill is the best way to send such legislation to President Obama’s desk,” the brief notice read. “If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill.”

It’s the combination of a partial Obamacare repeal and the Planned Parenthood defunding that is presenting McConnell’s conference with so many problems. With Cruz, Lee and Rubio out, as well probably as Ayotte, Collins, Kirk and Murkowski, it’s hard to see how the GOP leader gets to 51 votes, especially if any other Senate Republicans are keeping their opposition quiet.

And in case the political calculus wasn’t daunting enough, even the House’s restrained repeal ran into Byrd Rule problems.

Last Tuesday Senate parliamentarian Elizabeth MacDonough, the chamber’s impartial adjudicator, advised that the employer and individual mandates failed the test because their policy objectives were “merely incidental” to the budgetary impact, according to a Senate Democratic aide with knowledgeable of the ruling.

The reconciliation bill could proceed to the floor in its current form, but any Democratic senator could challenge the sections repealing the individual and employer mandates based on MacDonough’s ruling, in essence surgically removing them from the legislation. And because the vast majority of the savings in the House reconciliation bill derive from repealing the mandates, that could in turn jeopardize the entire bill’s privileged status, which is predicated on reducing the deficit.

In other words, Republicans can’t just allow the mandates to fall out of the bill and move on, a fact that makes it unlikely the bill will reach the floor this week, as some Republican senators had planned.

McConnell spokesman Don Stewart released a statement saying that Republicans would insert a substitute amendment to the reconciliation bill that would preserve “the provisions of the House-passed bill, while ensuring that the underlying bill complies with rules that apply only in the Senate.”

Senate Minority Leader Harry Reid’s (D-Nev.) office called the notion that the mandates could be repealed in any fix “simply false.”

MacDonough did green-light the Planned Parenthood defunding provision, though she noted there were “drafting errors” with the legislative text that should be fixed before floor consideration, according to Senate aides in both parties.

“As to sec. 202, nothing substantive is required, or any changes that will change the score,” Stewart told Morning Consult last week, referencing the part of the bill concerning Planned Parenthood.

Sen. Roy Blunt (R-Mo.), a member of the Senate Republican leadership team, said that a decision from the Senate parliamentarian was always going to gum up the works.

“The parliamentarian will not act on a hypothetical House bill that may be coming to the Senate,” he said in an interview last week, explaining why the House couldn’t have consulted MacDonough prior to drafting its own language. “I do think the House tried to be careful as they put a bill together that didn’t exceed the guidelines that the Senate would have to follow.”

In re-tooling the reconciliation package, Republican lawmakers could potentially target other parts of the healthcare legislation, but any additional proposal would still have to pass muster with MacDonough’s interpretation of the Byrd Rule. So far, Republican leaders have not articulated how specifically they will change the House text.

Morning Consult